Writ of Execution

[mabuta]

What is the name of your state (only U.S. law)? California

The defendant is in violation of the court ordered settlement/judgement and I am in the process of filing a Writ of Execution. I have found the defendant to be RMO and certified 10% owner of businesses located in 3 different counties.

1) Do I file a writ for each county to include the bond company?

2) Will I have to submit a claim along with the settlement agreement to the Contractors State License Board for each bond until the settlement has been collected in full?

On another note: The defendant has made claims of not being a party to either of the businesses. He represented himself as owner of one the business for which the original contract was written and agreed upon. One of his payments was written on a check by this same company.

Is there any way to find out authorized users of a business bank account?

Thanks in advance!

 

[tranquility]

What type of business is it? A corporation? An LLC?

What is an RMO? Is that the manager of the business?

 

[mabuta]

What type of business is it? A corporation? An LLC?

The business is an LLC and he is listed as "The Agent for Service of Process".

What is an RMO? Is that the manager of the business?

RMO is "Responsible Managing Officer"


Thanks!

Looks like I did not respond correctly.

Your question was: What type of business is it? A corporation? An LLC?

The business is an LLC and he is listed as "The Agent for Service of Process".

Your other question was: What is an RMO? Is that the manager of the business?

RMO is "Responsible Managing Officer"

I redid this so others can follow.

Thanks!!!

 

[Zigner]

Is there any way to find out authorized users of a business bank account?

There is no reason to find out - it's irrelevant.

 

[tranquility]

Collecting on an LLC is a huge problem. You could get a charging order on it, but there may not be any distributions to the judgment debtor so you won't get anything. You could foreclose on the debtor's interest, but that is even worse and you would be responsible for any taxes due even without a distribution. For example, the 90% owners can show income of $10K but reinvest it all in the business. Then, you would have to pay taxes on $1,000 without having any money from the business. You are not going to get a writ of execution on the overall business as the debtor only owns 10%. You might try selling the judgment to a debt collector if it is for any large amount. It seems collection will be difficult.

 

[tranquility]

There is no reason to find out - it's irrelevant.

Agreed. There is not going to be any taking of LLC assets directly.

 

[latigo]

What is the name of your state (only U.S. law)? California

The defendant is in violation of the court ordered settlement/judgement and I am in the process of filing a Writ of Execution (?). I have found the defendant to be RMO and certified 10% owner of businesses located in 3 different counties.

1) Do I file a writ for each county to include the bond company?

2) Will I have to submit a claim along with the settlement agreement to the Contractors State License Board for each bond until the settlement has been collected in full?

On another note: The defendant has made claims of not being a party to either of the businesses. He represented himself as owner of one the business for which the original contract was written and agreed upon. One of his payments was written on a check by this same company.

Is there any way to find out authorized users of a business bank account?

Thanks in advance!

You don't "file a Writ of Execution", it is filed with the clerk along with the sheriff's return.

Furthermore, such a writ cannot be issued unless it relates to an existing, unsatisfied, liquidated money judgment.

All were given is know is that "a settlement/judgment" was ordered by the court. Whether that order is sufficient to warrant the issuance of a Writ of Execution is highly problematical. By that I mean can the clerk and/or sheriff upon reading the court order determine the amount actually owing?

Normally under these circumstances the complaining party would file an affidavit and motion for an order directing the respondent to appear and show cause why he should not be held in contempt for the alleged noncompliance and that a money judgment should not issue in favor of the movant in such amount as shown due and payable.

Unfortunately, your anxiousness here will not substitute for sound legal judgment.

 

[mabuta]

Agreed. There is not going to be any taking of LLC assets directly.

I apologize for the confusion. The judgement is against the individual and not the LLC. I am just trying to find out about all of his assets to include any holdings in the LLC. This may not change the situation but just wanted to clear up who the judgement was against.

Thanks!

 

[Zigner]

I suggest you read the following (and also the links therein.)

http://www.courts.ca.gov/1014.htm

 

[tranquility]

I apologize for the confusion. The judgement is against the individual and not the LLC. I am just trying to find out about all of his assets to include any holdings in the LLC. This may not change the situation but just wanted to clear up who the judgement was against.

Thanks!

I think we understand that. The problem is all you can get is a charging order against the LLC or, perhaps, ownership of his rights. You cannot tap their till or foreclose on the member's rights in the LLC.

 

[mabuta]

You don't "file a Writ of Execution", it is filed with the clerk along with the sheriff's return.

Furthermore, such a writ cannot be issued unless it relates to an existing, unsatisfied, liquidated money judgment.

All were given is know is that "a settlement/judgment" was ordered by the court. Whether that order is sufficient to warrant the issuance of a Writ of Execution is highly problematical. By that I mean can the clerk and/or sheriff upon reading the court order determine the amount actually owing?

Normally under these circumstances the complaining party would file an affidavit and motion for an order directing the respondent to appear and show cause why he should not be held in contempt for the alleged noncompliance and that a money judgment should not issue in favor of the movant in such amount as shown due and payable.

Unfortunately, your anxiousness here will not substitute for sound legal judgment.

Thank you for your opinion as to the whole of my case... He (the defendant) is in default of more than 30 days of court established payments, he has been notified by certified mail of the default and my intended actions, and the declaration of default in payments has be filed and accepted with the court. I only wanted to know if I could file the writ in multiple counties.

 

[dcatz]

As latigo points out, it is unclear whether the breached settlement agreement has been converted to a judgment. (A word to the wise for the future, draft your settlement agreements in a way that your Declaration of Default, filed with the Court with a (proposed) Judgment will get that accomplished). Let’s assume you have the judgment, since talking about a writ is otherwise premature.

The first thing to do is encumber the businesses through the CSLB (Calif. Bus. & Pro. Code § 7090.1). Send the CSLB a copy of the judgment, identify the license(s) on which he is listed as RMO and say the there is a judgment for the sum of $XXXX.XX for which no payment has been made or payment agreement in place. No claim form is required for the CSLB.

The CSLB will send him a form letter saying that, unless there is a payment or payment agreement (acknowledged by you) or proof of a bankruptcy filing submitted within 30 days, the license(s) will be suspended and the businesses unable to work. That usually does the job. If you have reason to believe the businesses are operating after license suspension, report it to the S.W.I.F.T. unit of the CSLB.

Check to see if he/any of his businesses is involved in a job now. If so, get an Assignment Order directing the client to pay you what was to be paid to him. That will make “his: relation with the client precarious and is more effective that a writ of execution. By all means use a writ, if you have the necessary data. There is no prohibition against multiple simultaneous enforcement methods until the debt is satisfied.

Your post doesn’t include enough to tell if a claim against the bond will lie. Commonly not, but we don’t know details.

Unless you are involved professionally in judgment enforcement, the costs and logistics of getting banking data from a data aggregator is probably both prohibitive and an uncertain proposition, but you’ve already got a company check. Use a subpoena for documents and work from that for additional information. All of these mechanisms are likely to be as fast or faster than relying exclusively on a writ of execution.

 

[tranquility]

As latigo points out, it is unclear whether the breached settlement agreement has been converted to a judgment. (A word to the wise for the future, draft your settlement agreements in a way that your Declaration of Default, filed with the Court with a (proposed) Judgment will get that accomplished). Let’s assume you have the judgment, since talking about a writ is otherwise premature.

The first thing to do is encumber the businesses through the CSLB (Calif. Bus. & Pro. Code § 7090.1). Send the CSLB a copy of the judgment, identify the license(s) on which he is listed as RMO and say the there is a judgment for the sum of $XXXX.XX for which no payment has been made or payment agreement in place. No claim form is required for the CSLB.

The CSLB will send him a form letter saying that, unless there is a payment or payment agreement (acknowledged by you) or proof of a bankruptcy filing submitted within 30 days, the license(s) will be suspended and the businesses unable to work. That usually does the job. If you have reason to believe the businesses are operating after license suspension, report it to the S.W.I.F.T. unit of the CSLB.

Check to see if he/any of his businesses is involved in a job now. If so, get an Assignment Order directing the client to pay you what was to be paid to him. That will make “his: relation with the client precarious and is more effective that a writ of execution. By all means use a writ, if you have the necessary data. There is no prohibition against multiple simultaneous enforcement methods until the debt is satisfied.

Your post doesn’t include enough to tell if a claim against the bond will lie. Commonly not, but we don’t know details.

Unless you are involved professionally in judgment enforcement, the costs and logistics of getting banking data from a data aggregator is probably both prohibitive and an uncertain proposition, but you’ve already got a company check. Use a subpoena for documents and work from that for additional information. All of these mechanisms are likely to be as fast or faster than relying exclusively on a writ of execution.

Time out! I think we have a mismatch of facts here. Why do you think the debtor is a "licensee"? Are you talking about being the agent for the business? Also, are you saying a private judgment against a partial (minority) owner of an LLC can tie up the LLC unless it is paid? At best, that might be the "Notwithstanding any other provisions of law" that starts the statute. My understanding is the remedies of a creditor against the ownership of a debtor's LLC in CA is either a charging order or a taking of the ownership rights (except management).

 

[dcatz]

Tranq, as a general proposition, I agree with you respect to an LLC. That’s why I would choose the enforcement route which jams the companies by potentially putting them out of business or at least greatly encumbering them. The subject debtor is said to own his own company and be RMO for others. (We will assume no more than three total, otherwise different problems arise.)

Trying not to get too far afield from the OP’s question, as the RMO, he is the qualifying individual for the work for which a contractor is licensed. There are limitations on his license(s) permitting this set forth in Bus. & Pro. Code § 7068.1 but, as a practical matter, I’ve never even seen those called into question. The OP didn’t tell us, but I would bet he could confirm that the license of the company “for which the original contract was written” was the same as for the others or that the license used by the others was issued to the same individual. Encumbering one will cause “related licenses” to be encumbered.

From the data given, it’s not clear that anything more than the license of the original contractor would have to be encumbered but, if there is really an arms length relation with the other companies and they wish to continue operations, they would have to file a Notice of Disassociation and replace their RMO, with appropriate Application and fees, within 90 days of disassociation or still face automatic suspension.

The qualifying individual is responsible for supervision and control of the licensee’s construction business and, as far as I’m concerned, the remaining remedies discussed should be good law, ‘tho I must admit, in a fair amount of experience, I’ve personally only received payment or had a debtor go BK.

 

[tranquility]

Wild times. I had no idea such thumb could be placed on an LLC through a person. While we don't do audits any more, we still have many contractors and clients who sometimes need an audit. I'm not sure the risk shouldn't be on the audit disclosure when one uses an RMO or, at least, some of the quality control should be an examination of an RMO's finances. Thanks for the lesson.